Saudi Finance Forum: Growth & Stability

The Arab Bankers Association supported an event on 13 October 2011, Saudi Finance Forum: Growth & Stability, organised by the Arab British Chamber of Commerce at the Dorchester Hotel, Park Lane, London. Use the link below to download the programme.

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Welcome to the Arab Bankers’ Association! We are an association of bankers and finance professionals who work in Arab financial markets. Most of our members, both corporate and individual, are based in the U.K. but a significant proportion is based outside. Most of us - though not all - have spent much of our professional lives living and working in the Arab world. Our aims are simple:...

Assessing the prospects for nuclear energy in the Middle East

A new research paper by Dr. Carole Nakhle provides a good summary of the issues and challenges that will shape the use of nuclear energy in the Middle East.

Several nuclear power plants are scheduled to begin operations in the region over the next decade. They include the UAE’s Barakah project that will start generating electricity in 2017 and will provide about a quarter of the UAE’s electricity needs when complete in 2020. Saudi Arabia plans to have its first reactor generating electricity by 2022 and to have 16 nuclear plants operating by 2032, generating 15% of its electricity needs.

Jordan hopes to have a reactor operational by 2023, and Egypt hopes to have four reactors operationing within the next 12 years. Morocco, Tunisia and Algeria are also considering nuclear plans.

Dr. Nakhle’s paper considers several factors that will determine the feasibility and success of nuclear power in the region. For example, on the issue of ‘energy security’ she points out that half of the world’s uranium is controlled by four countries, with the Middle East containing only 1%. Most of the 30 countries that currently run nuclear plants have few hydrocarbon resources. In contrast, many Middle Eastern countries are hydrocarbon rich and have little need to find alternative energy sources.

Furthermore, the operation of nuclear plans (and the storage of nuclear waste) requires large quantities of water – a resource frequently in short supply in the Middle East.

On the issue of costs, Dr. Nakhle points out that the UAE’s Barakah plant will cost about $20 billion, while Saudi Arabia’s nuclear plans are expected to cost about $80 billion. Both these countries can support such investment but others in the region cannot.

There are also concerns about security. Iran’s Bushehr nuclear plant was repeatedly bombed by Iraq during the Iran-Iraq war in the 1980s and there are fears that future nuclear plants could be targeted by terrorists.

More broadly, Dr. Nakhle considers the need for Middle Eastern countries to rein in their rapidly growing demand for electricity. She cites a BP report that pointed out that in 1970 energy intensity in the region was less than half that of other non-OECD countries, whereas by 2010 it was 50% higher. Slowing the growth in domestic energy demand and improving energy efficiency are therefore the over-riding policy priorities in the Middle East, and this will entail reforming domestic energy prices, she says.

Dr. Nakhle concludes that nuclear energy will become a reality in some Middle Eastern countries, but that more efficient usage of existing resources (such as a reduction in flaring) and policy reform will be needed if the region is to find a comprehensive solution to its energy needs.

Dr. Nakhle’s paper was published by the Carnegie Middle East Centre in Beirut. The full text is available here.